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Prudential Monetary (PRU -0.67%)
Q3Â 2022 Earnings Name
Nov 02, 2022, 11:00 a.m. ET
Contents:
- Ready Remarks
- Questions and Solutions
- Name Members
Ready Remarks:
Operator
Girls and gents, thanks for standing by, and welcome to Prudential’s quarterly earnings convention name. [Operator instructions] I’ll now flip the decision over to Mr. Bob McLaughlin. Please, go forward.
Bob McLaughlin — Vice President, Investor Relations
Good morning, and thanks for becoming a member of our name. Representing Prudential on at present’s name are Charlie Lowrey, chairman and CEO; Rob Falzon, vice chairman; Andy Sullivan, head of U.S. companies; Scott Sleyster, head of worldwide companies; Ken Tanji, chief monetary officer; and Rob Axel, controller and principal accounting officer. We are going to begin with ready feedback by Charlie, Rob, and Ken, after which we’ll take your questions.
At the moment’s presentation could embody forward-looking statements. It’s doable that precise outcomes could differ materially from the predictions that we make at present. As well as, this presentation could embody references to non-GAAP measures. For a reconciliation of such measures to the comparable GAAP measures and the dialogue of things that might trigger precise outcomes to vary materially from these within the forward-looking statements, please see the slide titled Ahead-Wanting Statements and non-GAAP Measures within the appendix to at present’s presentation and the quarterly monetary complement, each of which will be discovered on our web site at investor.prudential.com.
And now, I am going to flip it over to Charlie.
Charlie Lowrey — Chairman and Chief Government Officer
Thanks, Bob, and because of everybody for becoming a member of us at present. Our third quarter monetary outcomes replicate the influence of market circumstances, together with the variability in various funding returns and decrease price revenue, in addition to an elevated stage of COVID-19 hospitalization claims in Japan, partially offset by underlying enterprise development, together with the profit from rising rates of interest. We proceed to rework our companies to be much less market-sensitive and higher positioned to ship sustainable long-term development. This contains investing in merchandise and options that meet the evolving wants of our prospects and reaching our $750 million value financial savings goal one 12 months forward of schedule.
Our rock-solid stability sheet offers the monetary power to navigate the present macroeconomic surroundings and help our prospects, shareholders, workers, and different stakeholders. Turning to Slide 3. I am going to begin off at present with an replace on how we’re investing in long-term development alternatives that meet the evolving wants of our prospects and help our imaginative and prescient to be a world chief in increasing entry to investing, insurance coverage, and retirement safety. In September, Prudential was chosen by IBM for a 50% participation within the second largest pension danger switch transaction in U.S.
market historical past, with a complete worth of over $16 billion. This transaction builds upon our management position on this market, the place we have now helped employers safeguard their employees’ retirements since pioneering the primary jumbo PRT transaction a decade in the past. We’re well-positioned to proceed to profit from the rising PRT market, which is predicted to have over $50 billion of whole {industry} transactions in 2022. Within the particular person retirement market, our FlexGuard suite continues to develop in each gross sales quantity and product scope, with a further $1 billion in gross sales, bringing the full to almost $12 billion since its launch in 2020.
Constructing upon FlexGuard’s super success, we plan to introduce FlexGuard Life, an index variable common life product later this month. We anticipate our companies will profit from the elevated demand for retirement decumulation merchandise over the following decade, as we strengthen our position as a pacesetter within the $300 billion annuities market. We’re making related development investments on behalf of our worldwide prospects as properly. In the course of the third quarter, we expanded into Argentina, our partnership with Mercado Libre, Latin America’s largest e-commerce platform with roughly 200 million customers.
Our expanded partnership follows our preliminary launch with Mercado Libre in Brazil earlier this 12 months, which delivers life insurance coverage and accident and well being merchandise tailor-made to the platform’s mass market buyer base. Shifting to Slide 4. As I famous earlier, we have now now achieved $765 million of annual run price value financial savings, exceeding our goal of $750 million, and accomplished this one 12 months forward of schedule. This contains $180 million realized within the third quarter.
To attain these value financial savings, we rigorously assessed all features of our enterprise and operations from our bodily workplace area, to how we leverage expertise to ship extra environment friendly buyer experiences. For instance, by embracing a hybrid work mannequin, we diminished our workplace area footprint within the U.S. by roughly 50%, which leads to an annual run price financial savings of about $50 million. On the shopper expertise entrance, our use of synthetic intelligence accelerated our particular person life underwriting from 22 days to 22 seconds.
And our new digital claims processing functionality can now ship funds to most prospects in six hours versus six days. We additionally automated and diminished the timing of fund verification and processing on about one-third of recent annuity gross sales from what was two to 3 weeks to now two to 3 days. And our group insurance coverage claims processing is now 3 times quicker, due to new knowledge techniques we have now put in. Turning now to Slide 5.
Our rock-solid stability sheet and disciplined method to capital deployment has helped Prudential navigate monetary and macroeconomic challenges for practically 150 years. In line with our AA monetary power score, we have now a powerful capital place, a high-quality, well-diversified funding portfolio and roughly $5 billion in extremely liquid property on the finish of the third quarter. We proceed to stability investing in our companies for long-term development with shareholder distributions. Along with the investments in our companies that I beforehand talked about, we additionally returned over $800 million to shareholders in the course of the third quarter by dividends and share repurchases for a complete of $7 billion because the starting of 2021.
Wanting forward, we anticipate greater rates of interest will economically profit our enterprise over time. We’ve got the monetary power to proceed to navigate the present financial and market surroundings. As we monitor developments, we’ll preserve our disciplined method to capital administration and redeployment, and our board will evaluation our 2023 capital plan early subsequent 12 months. Earlier than turning it over to Rob, I might like to the touch upon the management transition we introduced final week as a part of our considerate method to making a sustainable, long-term management construction.
Starting early subsequent 12 months, Andy Sullivan will transfer from his present position as head of our U.S. companies, together with PGIM, to steer our worldwide companies and PGIM. Caroline Feeney, who at present leads our U.S. retirement and insurance coverage companies, will tackle an expanded position as head of our enterprise portfolio within the U.S.
and can be part of our govt management workforce. Scott Sleyster, who at present leads our worldwide companies, will retire within the first quarter of 2023. We thank Scott for his super contributions to Prudential over the course of his 35-year profession with the corporate, and sit up for working carefully with Andy and Caroline of their new roles. I am going to now flip it over to Rob for an replace on our enterprise efficiency.
Rob Falzon — Vice Chairman
Thanks, Charlie. I am going to present an outline of our monetary outcomes and enterprise efficiency for our PGIM, U.S., and worldwide companies. I am going to start on Slide 6 with our monetary outcomes for the third quarter of 2022. Pretax adjusted working revenue was $1 billion, or $2.13 per share on an after-tax foundation, and mirrored decrease variable funding revenue pushed by market circumstances and an elevated stage of Japan COVID-19 hospitalization claims, partially offset by underlying enterprise development, together with a profit from rising rates of interest.
Our GAAP web loss per share was $0.78 on an after-tax foundation, primarily reflecting realized funding losses largely pushed by greater rates of interest. Turning to the working outcomes from our companies in comparison with the year-ago quarter. PGIM, our world funding supervisor, reported decrease asset administration charges ensuing from a discount in property beneath administration, reflecting greater rates of interest, widening credit score spreads, and declines in fairness markets. Outcomes of our U.S.
companies had been decrease than the year-ago quarter, reflecting decrease unfold revenue attributable to much less favorable variable funding revenue and decrease price revenue ensuing from the sale of a portion of the legacy variable annuities enterprise, the decline in fairness markets, and web outflows, partially offset by extra favorable underwriting as COVID-19 transitions to an endemic stage within the U.S. The lower in earnings in our worldwide companies mirrored elevated COVID-19 hospitalization claims in Japan and decrease unfold revenue pushed by much less favorable variable funding revenue. Turning to Slide 7. PGIM, our world energetic funding supervisor, has diversified capabilities in each private and non-private asset lessons throughout mounted revenue, options, actual property, and equities.
PGIM’s long-term funding efficiency stays enticing with greater than 80% of property beneath administration outperforming their benchmarks over the past five- and 10-year intervals. PGIM skilled retail outflows, primarily in mounted revenue, according to {industry} traits, because of the rising price surroundings, whereas institutional web flows proceed to be constructive. Because the funding engine of Prudential, the success and development of PGIM and of our U.S. and worldwide insurance coverage and retirement companies are mutually enhancing.
PGIM’s asset origination capabilities, funding administration experience, and entry to institutional and different sources of personal capital are our aggressive benefit. This helps our companies deliver enhanced options and create extra worth for our prospects. Our insurance coverage and retirement companies, in flip, present a supply of development for PGIM by affiliated flows and distinctive entry to insurance coverage liabilities that complement its monitor document of third-party development. PGIM’s annual price price elevated because of the continued shift towards greater price methods, together with our options and personal credit score enterprise.
We proceed to develop our options in personal credit score enterprise, which has property beneath administration of practically $230 billion throughout personal credit score, actual property fairness and debt, and personal fairness secondaries, and advantages from our world scale and market-leading positions. Throughout PGIM’s personal platform, we deployed $9.6 billion of capital this quarter. As we proceed to spend money on development areas which are aligned with the wants of our purchasers, we additionally stay disciplined to find alternatives to guard working margins by managing the enterprise extra effectively. Turning to Slide 8.
Our U.S. companies produced diversified earnings from charges, web funding unfold, and underwriting revenue, and profit from our complementary mixture of longevity and mortality companies. We proceed to shift our enterprise combine towards greater development and fewer market-sensitive merchandise in markets, rework our capabilities and value construction, and additional increase our addressable markets. Retirement methods achieved strong gross sales within the third quarter throughout its institutional and particular person strains of enterprise.
Institutional retirement closed practically $10 billion of pension danger switch transactions within the third quarter, together with being chosen by IBM for a 50% participation in a $16 billion pension danger switch transaction. Our give attention to superior execution, supported by the expertise of our high-quality PRT workforce, and our continued market management within the U.S. pension danger switch market contributed to IBM choosing us. We proceed to see a major alternative within the rising PRT market.
In particular person retirement, product pivots have resulted in continued robust gross sales of extra simplified options with $1 billion of FlexGuard and FlexGuard revenue gross sales within the third quarter, in addition to elevated mounted annuity gross sales. Our particular person life gross sales additionally replicate our earlier product pivot technique, with variable life merchandise representing roughly 70% of gross sales for the quarter. Group insurance coverage skilled a 50% enhance in gross sales in comparison with the year-ago quarter, reflecting greater nationwide account life and incapacity gross sales and execution of our product development technique to drive supplemental well being. Turning to Slide 9.
Our worldwide companies embody our Japanese life insurance coverage corporations, the place we have now a differentiated multichannel distribution mannequin, in addition to different companies aimed toward increasing our presence in high-growth rising markets. In Japan, we’re centered on offering high-quality service and increasing our geographic protection and product choices. Our needs-based method and safety product focus proceed to offer essential worth to our prospects as we increase our product choices to fulfill their evolving wants. For instance, we launched a yen-denominated funding product with a joint survivorship characteristic within the financial institution channel within the third quarter.
In rising markets, we’re centered on making a rigorously chosen portfolio of companies and areas the place buyer wants are rising, the place there are compelling alternatives to construct market-leading companies and the place the Prudential enterprise can add worth. Within the third quarter, we continued to give attention to increasing product and enterprise capabilities to fulfill the evolving wants of consumers. In Brazil, we expanded our digital gross sales utility and achieved document gross sales for the second consecutive quarter, pushed by robust efficiency throughout all distribution channels. We additional expanded our product choices on the Mercado Libre platform in Brazil and efficiently launched the gross sales platform in Argentina, as Charlie talked about.
As well as, we accomplished our tender supply for Alex Forbes, increasing our possession to 33% of a number one supplier of built-in retirement, funding, and wealth administration providers in South Africa. As we glance forward, we’re well-positioned throughout our companies to be a world chief in increasing entry to investing, insurance coverage, and retirement safety. We proceed to spend money on development companies and markets, ship industry-leading buyer experiences, and create the following era of monetary options to raised serve the varied wants of a broad vary of consumers. And now, with that, I am going to hand it over to Ken.
Ken Tanji — Chief Monetary Officer
Thanks, Rob. I am going to start on Slide 10, which offers perception into earnings for the fourth quarter of 2022 relative to our third quarter outcomes. As famous, pre-tax adjusted working revenue within the third quarter was $1 billion and resulted in earnings per share of $2.13 on an after-tax foundation. To get a way for a way our fourth quarter outcomes may develop, we advise changes for the next objects.
First, variable funding revenue was beneath expectations within the third quarter by 295 million. Subsequent, we alter underwriting expertise by a web 165 million. This adjustment features a placeholder for COVID-19 claims expertise within the fourth quarter of $20 million for our worldwide insurance coverage companies. We anticipate a decrease stage of hospitalization claims because of the latest authorities supported {industry} revision of eligible advantages for policyholders recovering from COVID-19 at dwelling in Japan.
And final, we anticipate seasonal and different objects to scale back adjusted working revenue by 166 million, primarily pushed by the seasonally elevated bills anticipated within the fourth quarter. This stuff mixed get us to a baseline of $2.71 per share for the fourth quarter. I am going to word that in the event you exclude objects particular to the fourth quarter, earnings per share could be $2.96. The important thing takeaway is that our underlying earnings energy improved attributable to enterprise development, together with the advantage of greater rates of interest that greater than offset fairness market depreciation.
Whereas we have now supplied this stuff to think about, please word that there could also be different components that have an effect on earnings per share within the fourth quarter. Turning to Slide 11. Our capital place helps our AA monetary power score. Our money and liquid property had been $5 billion on the excessive finish of our liquidity goal vary after investing in our companies to help long-term development, together with the capital to help our IBM pension danger switch transaction.
We’ve got substantial off-balance sheet assets, together with contingent capital and liquidity amenities. Over the long run, a better rate of interest surroundings is economically useful. Within the close to time period, the present market surroundings and the annual assumption replace cut back our regulatory capital and extra liquidity. We are going to stay prudent in our capital deployment, balancing the preservation of monetary power, funding in our companies for sustainable long-term development, and shareholder distributions.
Turning to Slide 12 and in abstract. We’re executing our plans to reposition our companies, we achieved our focused value financial savings one 12 months forward of plan, and we’re navigating the present macro surroundings with the monetary power of our rock-solid stability sheet. Now, I am going to flip it over to the operator in your questions.
Questions & Solutions:
Operator
[Operator instructions] Our first query at present is coming from Tom Gallagher from Evercore ISI. Your line is now dwell.
Tom Gallagher — Evercore ISI — Analyst
Good morning. The — my first query is simply on the decline within the holding firm money stability that dropped 2 billion sequentially regardless of the rise in web debt by 500 million. Ken, are you able to touch upon whether or not there have been any contributions to subs. I assume there have been no dividends taking out, however slightly little bit of coloration for what occurred there.
Ken Tanji — Chief Monetary Officer
Yeah. Hey, Tom, certain. I am going to cowl that. We did make a capital contribution of $1 billion to PICA, our principal U.S.
life insurance coverage firm. And that’s to help a excessive quantity of enterprise development, together with the, you understand, IBM and different pension danger switch transactions that we did. We additionally made a $200 million of contributions to fund just a few worldwide three way partnership investments that is a part of our programmatic M&A into rising markets. After which, as we talked about and highlighted that we funded shareholder distributions of 800 million.
The five hundred million of web debt enhance that we had, as we refinance our debt profile, was basically offset by holding firm prices, together with curiosity. We didn’t have dividends from our subs on this quarter. , the timing of dividends from our subs to the holdco are likely to range and are typically better within the fourth quarter and first quarter. Placing that each one collectively, we ended with extremely liquid property, 5.1 billion, nonetheless above our goal vary.
So, you understand, in sum, the first motive our holdco HLA decline, spotlight liquid property decline, was because of the 1.2 billion of enterprise development. , I additionally — I simply thought it could be useful to remind folks what I mentioned on our final name is that we anticipate the statutory funding wants for our U.S. life insurance coverage enterprise, together with our assumption updates, to be similar to our GAAP — the GAAP influence that we recorded in 2Q. The reserve strengthening shall be greater, stat is extra conservative, and that is going to be absolutely mirrored in our stat leads to the fourth quarter.
As I additionally talked about on our final name,, you understand, we have now extra capability already in PICA out there to fulfill that want. So, you understand, the mix of the capital that we contributed to help enterprise development this quarter and the surplus capability we had in PICA — inside PICA will stay with RBC ratios according to our AA monetary power goal. , when it comes to shareholder distributions, we’ll full our shareholder distributions for this 12 months within the fourth quarter with each dividends and share [Audio gap] they’re going to take into account our capital place, alternatives to spend money on our companies and now, more and more so, the volatility uncertainty of the economic system and markets wanting forward. So, we’ll issue that each one in.
However we’ll, you understand, proceed with our philosophy of being considerate and disciplined with our capital and stability funding in our companies with long-term development and sustaining monetary power and returning capital to shareholders.
Charlie Lowrey — Chairman and Chief Government Officer
Hey, Tom, it is Charlie. Let me simply add one factor as a result of I believe a part of your query is about can we execute on a long-term plan. And I am going to simply take it up a stage and say, we have now further levers we are able to pull and assets that we are able to use to just do that, to execute on our long-term plan.
Tom Gallagher — Evercore ISI — Analyst
Thanks rather a lot guys. That was very complete. And, Charlie, simply — so, you’d nonetheless — I believe it was the $10 billion three-year whole capital return plan. You continue to be ok with that given the levers that it’s important to work from?
Charlie Lowrey — Chairman and Chief Government Officer
Yeah. Ken, do you need to touch upon that?
Ken Tanji — Chief Monetary Officer
Yeah. Yeah. Once more, we’re — you understand, we’ll full — we have already returned 7 billion by the third quarter. We’ll full our plans for this 12 months.
And once more, you understand, our board will think about all of the issues that I discussed into their selections in early a part of subsequent 12 months.
Tom Gallagher — Evercore ISI — Analyst
OK. Thanks rather a lot, guys.
Operator
Thanks. Subsequent query is coming from Tracy Benguigui from Barclays. Your line is now dwell.
Tracy Benguigui — Barclays — Analyst
Thanks. First, congratulations to Scott, your retirement; Andy, Caroline, in your new position. I am questioning, given your progress to this point and occupied with market alternatives, do you are feeling like it is advisable elongate the three-year timetable of reallocating 5 billion to 10 billion of capital to greater development, much less market-sensitive enterprise.
Charlie Lowrey — Chairman and Chief Government Officer
Positive, Tracy. It is Charlie. Let me take that one. So, let me begin by saying we stay completely centered on executing on our transformation technique to develop into a much less market-sensitive and higher-growth firm.
As you have seen, we have made various programmatic acquisitions in PGIM and rising markets. And within the second quarter, we accomplished two key divestitures that diminished our total market sensitivity by 20%. So, we’re properly on our approach. Now, our path is probably not linear as totally different development alternatives current themselves at totally different occasions.
And I might word that our numerous set of companies offers alternatives to develop in numerous market environments as we have seen with this market surroundings. And we’re well-positioned to profit from this diversification. As an example, within the third quarter, our retirement methods enterprise did practically $15 billion of gross sales, together with a major PRT transaction, that show our management place on this market the place we consider there’s simply super development potential going ahead. However our enterprise system can also be self-reinforcing.
And for example, the latest IBM PRT — with the latest IBM PRT transaction, which is within the institutional retirement enterprise, that additionally introduced in over $8 billion in AUM to PGIM. So, by saying we’re centered on our high-growth companies, naming PGIM and rising markets, doesn’t suggest we’re not seeking to develop our different companies as properly. So, you understand, in abstract, what I might say is we’re positively dedicated to turning into a better development, much less market-sensitive firm. However our progress will depend on a few issues.
One is the alternatives that come up, and the second is the macroeconomic circumstances.
Tracy Benguigui — Barclays — Analyst
OK. That is very useful. So, it seems like you will have natural development alternatives. You are not solely counting on programmatic acquisition.
So, talking of natural and also you talked about PRT, I am simply questioning if we must always anticipate to see extra coinsurance sooner or later for these massive offers. And likewise, in the event you might touch upon, you understand, funded standing today and, you understand, what you have seen within the pipeline would that prohibit some offers getting executed.
Andy Sullivan — Government Vice President and Head of U.S. Companies
So, Tracy, good morning. It is Andy. And first, let me thanks for — I admire the congratulations. , you most likely might inform we’re exceptionally pleased with our workforce and of our capabilities in our pension danger switch enterprise.
, the truth that we performed the second largest transaction in historical past is second solely to the bottom breakage transaction we did with Basic Motors a few decade in the past for $29 billion. , this transaction, we did cut up 50-50 between us and one other supplier. And for readability, the choice to separate a deal is made by the plan sponsor versus carriers bidding collectively. As we glance ahead, we do not assume deal splitting shall be atypical, and we’ll all the time be open to that kind of state of affairs relying on the deal’s traits.
, total, the market in pension danger switch stays very strong. The {industry} skilled a 3rd successive record-breaking quarter. Third quarter got here in at 28 billion, which was a 60% enhance from final 12 months. Funded standing stays close to document ranges at 106%.
So, we now anticipate this 12 months, as you heard in Charlie’s remarks, to return in above $50 billion for the {industry}. And we consider that we’ll constantly see about $40 billion going ahead. , given the dimensions of that market, regardless of that it is a aggressive market, we anticipate, given our industry-leading monitor document and our capabilities, we’ll proceed to search out success at selecting our spots. And net-net, this shall be a pleasant natural development space for us over time.
Tracy Benguigui — Barclays — Analyst
Thanks.
Operator
Thanks. Subsequent query is coming from Ryan Krueger from KBW. Your line is now dwell.
Ryan Krueger — Keefe, Bruyette and Woods — Analyst
Hey, thanks. Morning. I had a query on particular person retirement earnings. I believe on a core foundation, they had been up about 60 million sequentially.
Are you able to assist us assume by the important thing drivers of that and, you understand, in the event you’d anticipate that to be sustainable long term?
Andy Sullivan — Government Vice President and Head of U.S. Companies
Sure. So, Ryan, it is Andy once more. Good morning. Thanks in your query on the person retirement enterprise.
We’re very happy with the momentum that we’re seeing this quarter. Let me communicate first about our core earnings progress, after which I am going to discuss our continued success at FlexGuard. We noticed a cloth carry in our core earnings, thanks primarily to the change within the rate of interest surroundings. And that is each on the brief and lengthy finish of the curve.
We get carry from rates of interest on our collateral on the brief finish, and we’re getting carry on the long-term facet in our portfolio as properly. And we’re seeing the FlexGuard block develop. That is why you noticed the step-up in our core earnings. And I might simply sort of return to what Ken mentioned earlier, greater charges are a very good factor total for Prudential.
Moreover, we’re very happy with the continued progress at constructing a really wholesome FlexGuard block of enterprise. Quarter in and quarter out, we stay a high share participant out there. We have achieved 11 billion in gross sales life to this point. We very very like the profitability of the block that we have introduced into the group.
And on the finish of the day, you understand, sort of again to the natural development dialogue, we see the retirement decumulation alternative within the nation as an excellent development alternative. And we have now all the best stuff to seize it.
Ryan Krueger — Keefe, Bruyette and Woods — Analyst
Thanks. After which simply wished — I had one fast capital follow-up. Charlie, you had talked about that you’ve got different levers which you can pull to execute in your long-term capital deployment plan. Seeing in the event you might increase on that in any respect.
And I assume, most likely associated to that, simply, you understand, you contributed capital earlier this 12 months to Bermuda. At what cut-off date do you assume you may see extra enterprise there to then launch capital within the U.S.? Thanks.
Charlie Lowrey — Chairman and Chief Government Officer
Positive. Let me take the primary a part of that after which flip it over to Ken. I am going to simply offer you a few fast examples. One could be form of ongoing reinsurance transactions that we proceed to evaluation.
And the opposite could be, we have now levers, each on and off stability sheet that we are able to pull. So, we have now numerous totally different levers and assets that we are able to use and frequently have a look at them in an effort to entry further capital. And, Ken, do you need to discuss Bermuda?
Ken Tanji — Chief Monetary Officer
Sure, Ryan. Yeah, the Bermuda sub that we launched earlier within the 12 months is an efficient instance of the levers that Charlie referenced. We’ve got a brand new reinsurer in Bermuda. It is referred to as Lotus Re.
We did capitalize it with $800 million earlier this 12 months, and we have reinsured a block of variable life enterprise to it. So, it would create capital effectivity. And it is a reinsurance functionality that is form of one other device in our toolbox going ahead.
Ryan Krueger — Keefe, Bruyette and Woods — Analyst
Nice. Thanks.
Operator
Thanks. Subsequent query at present is coming from Suneet Kamath from Jefferies. Your line is now dwell.
Suneet Kamath — AllianceBernstein — Analyst
Hello. Thanks. Good morning. Simply wished to circle again on capital.
You made feedback about 2023 a few occasions. However simply to stage set, I imply, we’re used to occupied with, you understand, sort of the 65% free money move conversion as form of, you understand, the extent of capital return that you simply guys would do on an annual foundation, ex any particular particular transactions. Ought to we be occupied with that as a baseline for subsequent 12 months? Or are you signaling that, you understand, the working surroundings is slightly bit more difficult, so possibly you’d information to one thing slightly bit decrease than that?
Ken Tanji — Chief Monetary Officer
Yeah. Hey, Suneet. Yeah, 65%, in the event you checked out our — what we have generated in free money move from our companies over time, that is been the typical. It has been, in some years, greater than that; and in some years, decrease than that.
Money move from our companies this 12 months is beneath our historic common. That is each as, you understand, we proceed to spend money on our companies for long-term development, but in addition work by the statutory reserve will increase in our life insurance coverage companies that we up to date this 12 months. So, it would range over time, however, you understand, we expect given our development charges and our enterprise profile, that is, you understand, what our historic common has been.
Suneet Kamath — AllianceBernstein — Analyst
OK. Acquired it. After which simply if I might come again to that $1 billion infusion into PICA, I imply, my tough math would counsel possibly half of that was associated to, you understand, the IBM PRT deal. So, that leaves one other $400 million, $500 million left.
And I hear you on FlexGuard funding that development, however, you understand, particular person retirement continues to be in outflows. And I might have thought the capital launch from withdrawals would have form of supported the brand new enterprise. I assume, I am simply making an attempt to grasp what the opposite piece of it’s into PICA other than the PRT transaction. Thanks.
Ken Tanji — Chief Monetary Officer
Yeah. I do not know what rule of thumb you are utilizing on particular enterprise strains, nevertheless it was — for us, it was primarily associated to not simply the IBM transaction however the different offers that we did as properly. And the expansion in our FlexGuard enterprise. And, you understand, we proceed to see good profitability and money flows from our present VA enterprise as properly.
Suneet Kamath — AllianceBernstein — Analyst
Was there any influence from rate of interest hedges? You had a GAAP loss, however simply questioning if there’s any influence from that on the statutory outcomes.
Ken Tanji — Chief Monetary Officer
Yeah. There’s, Suneet, is the rise in rates of interest has been very swift. And over time, that may permit us to speculate our insurance coverage reserves at greater yields and enhancing profitability and money flows. However within the close to time period, our statutory surplus within the U.S.
enterprise — for our U.S. enterprise is diminished by what we take into account a noneconomic statutory reserve methodology that tends to present itself when charges rise, and we skilled unrealized and realized losses on our mounted revenue and derivatives. This isn’t distinctive to us. We consider it is a difficulty for the broader {industry}, and it is uneconomic in nature and must be addressed.
And there is loads of discussions happening with regulators within the {industry} about this. So, we’ll handle the change within the price surroundings, and we’ll preserve regulatory capital is according to our AA monetary power targets. However, you understand, there’s a short-term influence on our statutory capital.
Suneet Kamath — AllianceBernstein — Analyst
Are you able to measurement that in any respect?
Ken Tanji — Chief Monetary Officer
, it is nonetheless — it may be topic to, you understand, the place the charges transfer. And so, you understand, that is nonetheless dynamic.
Suneet Kamath — AllianceBernstein — Analyst
OK. Thanks, Ken.
Operator
[Operator instructions] Our subsequent query is coming from John Barnidge from Piper Sandler. Your line is now dwell.
John Barnidge — Piper Sandler — Analyst
Thanks very a lot. Seasonally, 3Qs had usually been the very best, extra gifted quarter in any given 12 months. This can be a pre-pandemic world, in fact. With COVID now clearly endemic, did that typical mortality seasonality return this 12 months?
Andy Sullivan — Government Vice President and Head of U.S. Companies
Hey, John. Good morning. It is Andy. I am going to discuss our COVID.
We deliberately, as we have talked about many occasions previously, handle our enterprise combine to have a very good stability between longevity and mortality. That completely paid us dividends all all through the pandemic. Throughout 3Q, the U.S. skilled 42,000 deaths, which was, you understand, 17,000 greater than our estimate.
However the truth is, we proceed to see a declining influence from COVID within the U.S. Let me simply hit slightly bit about every enterprise. In group insurance coverage, our life profit ratio was 91.4%. It did replicate pre-pandemic mortality.
That was barely elevated attributable to unintended demise and dismemberment claims that we very a lot see simply as a pure quarter-to-quarter variability, nothing extra. We’re very happy that we proceed to see working age friends and its influence on working as persevering with to say no. In particular person life, we noticed our mortality precise to anticipate it on the low finish of our vary, 97%. And we noticed notably good efficiency within the smaller face quantity bands, and that’s usually the place we’d see the COVID expertise present up.
In institutional retirement, we did see underwriting good points above our seasonalized expectations, notably in pension danger switch, however once more, not shocking given the typical age of that block of enterprise. So, you understand, the underside line is, given the balanced combine of companies that we have now, we very a lot anticipate this shall be very manageable as COVID continues to shift into an endemic state.
John Barnidge — Piper Sandler — Analyst
Nice. After which, my follow-up query. Institutional move is constructive however materials deceleration in PGIM. Retail improved in outflow.
Are you able to possibly discuss how FX influence is altering the place you are seeing demand, both a geographic perspective or from an asset perspective? Thanks.
Andy Sullivan — Government Vice President and Head of U.S. Companies
Yeah, John. It is Andy. I am going to take your query on flows. , as we have all the time talked about, flows will range quarter to quarter, so we keep very centered on our long-term monitor document.
In Q3, we skilled third-party web outflows of 4 billion, pushed on the retail facet. Institutional web flows remained constructive with robust constructive flows into each Jennison fairness and actual property debt. So, displaying the advantage of our diversified portfolio. We’re very happy with our constructive $9 billion in institutional flows 12 months to this point.
I might additionally word that we skilled good affiliated flows. So, from our insurance coverage transactions, just like the IBM transaction, we noticed 7 billion in affiliated flows in Q3 and 14 billion 12 months to this point. , that could be a essential a part of our technique. And it displays the synergies between our legal responsibility era functionality, in addition to our asset administration functionality.
, to your particular query about retail outflows had been 4.6 billion, that was a marked enchancment from the 8.3 billion final quarter. Very like the remainder of the {industry}, we proceed to be impacted by headwinds in each energetic mounted revenue and development fairness. , so far as the place are the flows going, the flows are tending to enter passive. And within the short-duration methods, we’re clearly not a passive participant.
So far as FX impacts, we actually have not seen something materials to talk of. , on the finish of the day, we’re extremely assured that our diversified product portfolio has us well-positioned that, because the surroundings settles down and stabilize and flows begin to shift again in, we have now the expertise to succeed and we’ll be a web winner as we all the time have been. As we have talked about earlier than, we have skilled 18 out of 19 years of constructive inflows.
John Barnidge — Piper Sandler — Analyst
Thanks.
Operator
Thanks. Your subsequent query is coming from Elyse Greenspan from Wells Fargo. Your line is now dwell.
Elyse Greenspan — Wells Fargo Securities — Analyst
Hello. Thanks. Good morning. My first query is on the Japan COVID losses.
You had guided final quarter to possibly seeing, you understand, about 50 million of unfavorable underwriting influence. And that got here in at 200 million this quarter. So, are you involved that a few of that leads into the fourth quarter? And do you assume that there may very well be any motion round your reserves?
Scott Sleyster — Head of Worldwide Enterprise
Thanks, Elyse. That is Scott. In the course of the quarter, Japan skilled the biggest surge of COVID circumstances because the starting of the pandemic. Japan form of did a extremely good job upfront, however omicron hit them laborious a lot later.
The brand new infections had been primarily concentrated in youthful ages. And so they peaked in August, I believe, at like over 240,000. They’ve since declined fairly considerably. I believe they’re working round 40,000 at present.
So, they’re all the way down to a few sixth to the place they had been. From the start of the pandemic and according to regulatory steering, A&H claims supplied for a policyholder funds associated to hospitalizations regardless of whether or not the affected person really checked into the hospital. So, with the massive units of COVID circumstances, we did, in truth, see an enormous spike in A&H claims, which is what you had been seeing. Beginning September 26, the {industry} in settlement or with help from the federal government decided that hospitalization advantages will now not be paid if the insured people should not really within the hospital with only a few exceptions, issues for folks over 65, or pregnant girls, and sure severe comorbidities.
So, we anticipate the change right here to be fairly dramatic within the fourth quarter. To begin with, the an infection ranges are down an incredible deal, after which the qualification ranges have been considerably restricted. I believe Ken already talked about that we have a placeholder for 20 million versus the 180 million for the fourth quarter. So, we’ll proceed to carefully monitor the state of affairs.
And, you understand, as previously, we stay centered on actually taking good care of our prospects, but in addition searching for our workers and sustaining the power of our distribution channels.
Elyse Greenspan — Wells Fargo Securities — Analyst
Thanks. After which, my second query, what are you guys seeing when it comes to the bottom spreads inside institutional retirement? How rapidly are these accelerating? And the way ought to we take into consideration the earnings development potential in that section from rising charges?
Ken Tanji — Chief Monetary Officer
Elyse, it is Ken. I am going to begin. And, you understand, we have now seen, because the rise in charges and the rising yields have performed, out a greater alternative to speculate at extra enticing phrases. And also you see that resulting in earnings enchancment.
However most likely extra importantly would be the enterprise development, notably with the with the pension danger switch enterprise that we simply placed on the books on the finish of the third quarter.
Andy Sullivan — Government Vice President and Head of U.S. Companies
Yeah. And, Elyse, it is Andy. I might simply add, we have now loads of momentum in our institutional retirement enterprise. We’ve got distinctive folks, nice capabilities, nice model and distribution techniques, that is actually second to none.
And clearly, you have heard about that from a pension danger switch perspective. However we had 13.5 billion in gross sales and institutional retirement. So, it goes properly past simply pension danger switch. We additionally had 1.5 billion in investment-only secure worth and 1.2 billion in longevity reinsurance.
So, we have now excellent momentum, and it was a banner quarter for us in institutional retirement.
Elyse Greenspan — Wells Fargo Securities — Analyst
OK. Thanks.
Operator
Thanks. Subsequent query is coming from Erik Bass from Autonomous Analysis. Your line is now dwell.
Erik Bass — Autonomous Analysis — Analyst
Hello. Thanks. Your outlook implies greater seasonal bills of, I believe, 115 million within the fourth quarter, which is lower than the 125 million to 175 million vary that you simply usually anticipate. Is that this a operate of simply being disciplined on bills given the surroundings? Or ought to we consider this as a extra everlasting pattern, given the cost-saving actions that you’ve got highlighted?
Ken Tanji — Chief Monetary Officer
Hey, Erik. It is Ken. We’re being extra disciplined, nevertheless it’s actually timing. , we see loads of that coming into the fourth quarter as typical.
And I would not learn an excessive amount of into that. It is — sure, we’re being disciplined, however there’s additionally timing issues.
Erik Bass — Autonomous Analysis — Analyst
Acquired it. Thanks. After which, are you able to discuss how the yen actions are affecting demand for U.S. dollar-denominated merchandise in Japan? Does this materially change the patron worth proposition and the outlook for demand or persistency?
Scott Sleyster — Head of Worldwide Enterprise
Thanks, Erik. That is Scott. I am going to go forward and take that. There are a number of issues that go on from the power of the U.S.
greenback. On the one hand, you should have a cohort of consumers who’ve purchased, you understand, sort of funding merchandise, and so they could need to terminate to take a achieve if it is a web constructive versus any give up cost. And for those who have everlasting life, they might be occupied with lowering protection as a result of a sure greenback quantity will present extra yen protection, which is in the end usually what they’re in search of. I believe your query centered extra on the gross sales facet.
With the greenback being this robust, we expect those who shall be in search of U.S. greenback merchandise shall be sizing down their buy once more as a result of, basically, they’re wanting again to the protection of the — of in the end the way it covers them in yen. That being mentioned, two different good issues, I believe, are happening with greater charges, U.S. greenback funding merchandise do look extra enticing, and in the end, additional time, whereas we have now some short-term headwinds as a result of we use swaps to hedge.
Within the lengthy fall, this can add to our web funding revenue, which we view is a tailwind in that market.
Erik Bass — Autonomous Analysis — Analyst
Acquired it. Thanks.
Operator
Your subsequent query is coming from Wilma Burdis from Raymond James. Your line is now dwell.
Wilma Burdis — Raymond James — Analyst
Hey. Good morning. Might you make clear how the Lotus Re Bermuda entity works to create capital efficiencies? And is there a plan to herald third-party capital in Bermuda?
Ken Tanji — Chief Monetary Officer
Yeah. The Lotus Re is an inside reinsurance functionality that is primarily based in Bermuda. And we discover that sure merchandise in our preliminary use of it was with variable life that we discover that the regime there, which is a really strong, you understand, reserving normal is extra principle-based and is best aligned with the economics of that enterprise. And consequently, by transferring that to reinsuring that to that regime, we get releases of reserves and capital in PICA.
And once more, it is our efforts to actually align the economics of our companies with reserve and capital requirements which are strong and risk-sensitive, acknowledge the character of the enterprise and are a greater match for that kind of enterprise.
Rob Falzon — Vice Chairman
Wilma, it is Rob. Simply form of following on the second a part of your query. So, in that individual entity, no, our intent isn’t to herald third-party capital. As Ken alluded to, it is a sort of a captive automobile.
Having mentioned that, we’re keenly conscious of the elevated institutional urge for food coming into this sector. And as we have mentioned earlier than, we do not assume that there is a agency who’s higher positioned to determine how one can fulfill the intersection of demand for our prospects on the legal responsibility origination facet with urge for food for funding into these kinds of investments from the institutional facet. So, nothing to speak about close to time period there, however we expect we’re notably well-positioned so as to have the ability to exploit that.
Wilma Burdis — Raymond James — Analyst
OK. Thanks.
Operator
Thanks. Subsequent query is coming from Alex Scott from Goldman Sachs. Your line is now dwell.
Alex Scott — Goldman Sachs — Analyst
Hello. I had a follow-up on a number of the questions on capital and the holdco money stability. After I take into consideration development, you understand, I admire that there is the PRT. Ex possibly some heightened PRT development, I might assume PICA, you understand, could be a bit extra self-funding.
And I am simply making an attempt to grasp if possibly a number of the need-to-fund development from the holdco stability has to do with the expectation of what is going on to occur in 4Q round this UL evaluation. And the explanation I ask is simply, you understand, if that’s a part of the contemplation, that is fantastic. And it is really good as a result of, you understand, it means possibly you needn’t contribute anymore in 4Q. And that is actually what I am making an attempt to determine is, you understand, if you undergo that evaluation in 4Q, would this must happen once more? Like, will there must be more money from the holdco that goes down into PICA to assist fund, you understand, that influence?
Ken Tanji — Chief Monetary Officer
Sure. So, Alex, the — PICA is producing statutory capital with its enterprise profile. However the measurement of the enterprise development that we skilled this quarter was fairly excessive and distinctive. And that is why — we thought it was a really enticing use of capital and deployed capital for that goal.
We acknowledged that the belief replace would require funding wants, and that was a use of capital as properly. However we had — on the time of the second quarter, we had — we’re well-positioned to soak up that capital requirement inside PICA, together with the — utilizing the money move and statutory surplus that is being generated by our companies. We’ll be wanting on the fourth quarter and evaluating once more — properly, and I ought to point out, as I additionally described, we have now had some short-term capital that’s being held in reserves probably for what we take into account noneconomic reserving, given the rise in charges. After which, we’ll, once more, as we all the time do, within the fourth quarter, have a look at our capital place, our alternatives to deploy capital attractively, and ensure we’re sustaining PICA at our AA monetary power requirements.
Alex Scott — Goldman Sachs — Analyst
Acquired it. That is useful. After which, possibly slightly little bit of a extra broad query on Japan. Might you discuss how a weaker yen impacts your online business, and, you understand, if that must be one thing we ponder as we take into consideration money move in 2023, both constructive or detrimental?
Scott Sleyster — Head of Worldwide Enterprise
Thanks, Alex. That is Scott. , we have been working in Japan for a very long time. And, you understand, in my a few years right here, I’ve seen the yen as little as within the excessive 70s to as excessive as it’s, you understand, at present.
So, as that occurs, buyer preferences will shift. And so we’ll see extra, you understand, yen gross sales, for instance, if greenback merchandise get, you understand, priced too excessive. However, we might even see extra greenback deposit kind merchandise that shall be extra enticing within the financial institution or different components of the GIB channel, you understand, associated to the place the greenback is. So, I might say, essentially, we have now the flexibility to adapt, and we have demonstrated that we have executed that over time.
I assume, what I might come again to is, I might say, we’re very disciplined in how we worth our enterprise in Japan. A part of the explanation you have seen the financial institution channel down is we’re — we have maintained our self-discipline round profitability. We have not been chasing deposit merchandise when the margins, you understand, had been actually tight. So, I really feel excellent in regards to the franchise we have now there.
We see much less worth sensitivity in channels the place we have now a most well-liked place like life planners and a number of the affinity teams. And, you understand, we’ll adapt the product combine primarily based on buyer demand, however we’re all the time going to maintain our pricing self-discipline entrance and middle.
Ken Tanji — Chief Monetary Officer
And, Alex, I am going to simply add. , we even have a really established hedging program with our Japanese enterprise that hedges each earnings and web fairness place. And, you understand, given the power of the greenback, that has a $1.8 billion achieve on the finish of the third quarter.
Alex Scott — Goldman Sachs — Analyst
Acquired it. Thanks.
Operator
Thanks. Subsequent query is coming from Mike Ward from Citi. Your line is now dwell.
Mike Ward — Citi — Analyst
Thanks, guys. So, you talked about probably reinsurance as one lever for a supply of capital. Simply questioning if meaning we must always form of expect, you understand, annuities reinsurance deal? Or might it’s life or anyplace else? Any coloration there?
Charlie Lowrey — Chairman and Chief Government Officer
Positive. Let me take that. That is Charlie. , first, I am going to cope with each annuities after which discuss slightly bit about life.
, we’re actually happy with the valuation for the block of conventional variable annuities with assured residing advantages that we bought as evidenced by the achieve on sale we reported. And we’ll proceed to discover doable further alternatives to derisk in-force blocks of conventional VA enterprise. We anticipate to achieve our aim of lowering market sensitivity by the pallet transaction we simply accomplished and thru the pure runoff of conventional variable annuities enterprise over time and as we’re not able of getting to do one other transaction. However having mentioned this, we’ll proceed to discover doable further alternatives.
However we’ll solely do one thing, as we have mentioned earlier than, if it is in the very best curiosity of stakeholders. So, that is on the annuity facet. On the life block facet, you understand, as we have famous previously, we have devoted assets to varied alternatives aligned with our technique of turning into a better development and fewer market-sensitive firm. And consequently, we would actually take into account alternatives for a life sub-block in the event that they got here our approach, however with the caveat that it has to make sense for shareholders.
So, we’ll be disciplined in our method as the person life enterprise continues to be core to our goal.
Mike Ward — Citi — Analyst
Nice. Thanks. That is very useful. After which, possibly on PRT, simply questioning if there’s sort of a benchmark that possibly you could possibly give when it comes to how you consider earnings per $1 billion of PRT enterprise or one thing like that.
I assume one among your, you understand, bigger friends has given this previously, I believe it is round $7 million, $8 million of earnings per $1 billion of PRT. Questioning if that sounds ballpark correct?
Ken Tanji — Chief Monetary Officer
Yeah. Hey, Mike, that is Ken. , all of the offers are slightly totally different. I do not assume placing out a benchmark is — you understand, could be acceptable.
Mike Ward — Citi — Analyst
OK. Thanks.
Operator
Thanks. Our subsequent query at present is a follow-up from Tracy Benguigui from Barclays. Your line is now dwell.
Tracy Benguigui — Barclays — Analyst
Thanks. I simply wished to revisit the statutory reserve cost you may be taking within the fourth quarter. Simply assist me perceive higher why it could be comparable in measurement on the GAAP facet. As a result of as you talked about, you understand, statutory reserves are extra conservative.
I imply, I might think about there’d be some cushion there. In the event you might elaborate on the compatibility.
Ken Tanji — Chief Monetary Officer
Yeah. Tracy, will probably be greater. However once more — and since — typically, as a result of the stat is extra conservative. And it is also — it is simply totally different.
However once more, we have now capability to soak up that, and, you understand, we nonetheless maintain that view.
Tracy Benguigui — Barclays — Analyst
OK. While you say greater, you imply on absolute phrases, or the contribution shall be greater? I am slightly bit confused.
Ken Tanji — Chief Monetary Officer
No, I am sorry. Once we took the cost, we consider that we had and we proceed to consider we have now capability to soak up that inside PICA’s extra capital place consequently.
Tracy Benguigui — Barclays — Analyst
OK. However I believe final quarter, I believe it was one thing like 1.4 billion pre-tax. So, are we speaking the identical greenback quantity for stat?
Ken Tanji — Chief Monetary Officer
It might be greater once more. We’re nonetheless finalizing these. That shall be finalized in our fourth quarter outcomes. However once more, we have now the capability to soak up that inside PICA, and we’ll proceed to keep up RBC ratios according to our AA requirements.
Tracy Benguigui — Barclays — Analyst
OK. Thanks.
Operator
Thanks. Our subsequent query is a follow-up from Ryan Krueger. Your line is now dwell from KBW.
Ryan Krueger — Keefe, Bruyette and Woods — Analyst
Thanks. I figured I simply requested this because it wasn’t requested final quarter. Would you be capable of say what your ULSG stat reserve whole is and what you moved to the last word lapse price assumption to if you did the evaluation final quarter?
Ken Tanji — Chief Monetary Officer
I believe we have to observe up on each of these. They’re fairly particular, if that is all proper.
Ryan Krueger — Keefe, Bruyette and Woods — Analyst
Yeah, no downside. I simply figured I might give it a shot. Thanks.
Operator
Thanks. Subsequent query is a follow-up from Tom Gallagher from Evercore ISI. Your line is now dwell.
Tom Gallagher — Evercore ISI — Analyst
Thanks. Only one query on the holding firm money, once more, to return again to the — the 5.1 billion, I consider, contains 1.5 billion that we must always take into consideration for prefunding a debt maturity within the center a part of 2023. I simply wished to verify that that is the intention. And will we take into consideration the holding firm money actually as 3.6 billion on a web foundation? Thanks.
Ken Tanji — Chief Monetary Officer
Yeah, Tom. In our holding firm, money place will range relying upon the timing of once we challenge debt or debt matures or we name it. We have constantly made it a very good apply to prefund maturing and callable debt 12 to 18 months upfront. And, you understand, this — what this does is it reduces our refinancing danger and allows us to be selective within the timing of debt funding relative to specific market circumstances.
In August, we issued 1.5 billion of debt, and we have earmarked that for debt that is callable subsequent 12 months. The timing was good. We’re pleased with the end result. And we’ll proceed to prefund debt as a very good apply.
And total, although, in the event you checked out our stage of debt over the past three years, it has been at a reasonably constant stage. It’ll range relying on timing of maturities and issuance. However total, it hasn’t modified that a lot. We even have — as we proceed to spotlight contingent sources of debt.
So, total, we really feel excellent in regards to the stage of our debt that is according to our AA monetary power score and the way we handle refinancings of our debt very properly as properly.
Charlie Lowrey — Chairman and Chief Government Officer
Hey, Tom. It is Charlie. I’d simply reiterate what I mentioned to start with as properly. , we consider we have now different levers and assets by which to execute on our plan.
So, there are — you may have a look at it within the a technique you probably did. However however, as Ken mentioned, and as we have reiterated all through the decision, we have now different means by which to execute on our plan as properly.
Operator
Thanks. We have reached the top of our question-and-answer session. I might like to show the ground again over to Mr. Lowrey for any additional closing feedback.
Charlie Lowrey — Chairman and Chief Government Officer
OK. Thanks, operator. And thanks for becoming a member of us at present. Earlier than I conclude, I need to acknowledge the sudden passing of George Paz final week, a member of Prudential’s board of administrators for the previous six years.
George was an integral member of our board, with a novel perspective and deep enterprise expertise that helped us form our pondering on a large number of points. He shall be drastically missed and remembered as each a trusted advisor and as a pal. I hope we demonstrated throughout this name the progress we’re making to rework Prudential to ship sustainable, long-term development and meet the evolving wants of our prospects. Wanting forward, we stay assured in our technique and the power of our firm.
For practically 150 years, Prudential has been there for its prospects and different stakeholders, who we’ll proceed to function we try to be a world chief in increasing entry to investing insurance coverage and retirement safety. Thanks once more for becoming a member of us at present.
Operator
[Operator signoff]
Period: 0 minutes
Name contributors:
Bob McLaughlin — Vice President, Investor Relations
Charlie Lowrey — Chairman and Chief Government Officer
Rob Falzon — Vice Chairman
Ken Tanji — Chief Monetary Officer
Tom Gallagher — Evercore ISI — Analyst
Tracy Benguigui — Barclays — Analyst
Andy Sullivan — Government Vice President and Head of U.S. Companies
Ryan Krueger — Keefe, Bruyette and Woods — Analyst
Suneet Kamath — AllianceBernstein — Analyst
John Barnidge — Piper Sandler — Analyst
Elyse Greenspan — Wells Fargo Securities — Analyst
Scott Sleyster — Head of Worldwide Enterprise
Erik Bass — Autonomous Analysis — Analyst
Wilma Burdis — Raymond James — Analyst
Alex Scott — Goldman Sachs — Analyst
Mike Ward — Citi — Analyst
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